What Is Cap Rate – Understanding Cap Rate in Commercial Real Estate
What Is Cap Rate - Understanding Cap Rate in Commercial Real Estate Cap Rate (Capitalization Rate): The capitalization rate, or cap rate, is a key metric in commercial real estate used to evaluate the profitability and potential return on an investment property. It is calculated by dividing the property's net operating income (NOI) by its current market value or purchase price. The cap rate provides investors with a straightforward percentage that represents the expected annual…